Alfesca hf. - Financial Statement Release

Strong results for financial year 2007/08

Strong results for financial year 2007/08

Sales €647.4 m up 9%
EBITDA €62.5 m up 22%
EBITDA margin 10%
Net profit €28.6 m up 28%

Highlights

•	Net sales 
•	FY2007/08		€647.4m up 9%
•	Q42007/08		€132.0m down 5.4%, but stable on like for like basis, despite:
o	Easter falling in Q3 instead of Q4 as last year
o	adverse currency impact totalling €9.1 m due to EUR/GBP exchange rate
•	EBITDA
•	FY2007/08		€62.5m up 22%
•	Q4 2007/08		€8.5m up 43% (up 21% on like for like basis), despite:
o	Easter falling in Q3 instead of Q4 as last year
o	adverse currency impact due to EURGBP exchange rate totalling €1.0 m
•	EBITDA margin		10% (on continuing operations and excluding exceptional items)
•	Net profit
•	FY2007/08		€28.6 m up 28%
o	Q4 2007/08		€3.5m stable against last year
•	Earnings per share from continuing operations € 0.491 up 26%
•	Net cash flow from operating activities €60m up by 33% or €15m
•	Equity ratio increased to 47.6% and net debt reduced by €25 m to €166.7m
•	Board of directors will propose a payment of dividends totalling €12 m at the
Group's AGM on 20 October 

Xavier Govare, CEO:"Alfesca delivered solid and satisfactory results for the 2007/08 financial
year in a very challenging environment. 

In July 2007, when Alfesca started its financial year, we could not have
foreseen the many significant challenges that we were about to face.  These
included a strong increase of our raw material costs; utility and energy costs
reaching historical highs; a general reduction in consumption in our main
geographic markets, falling consumer confidence; increasing inflation across
Europe and a very adverse currency fluctuation due to the weakening of the
Pound sterling against the Euro, which negatively affected the results of our
UK operations. 

Despite this gloomy back drop, I am pleased to say that we responded to all
these difficulties vigorously and with total commitment of our people. 
Alfesca's business model, based on four pillars, has clearly demonstrated its
strength during this testing time, with its capacity to resist these challenges
better than others.  The determination of our people to find solutions and to
continue to innovate and develop our markets has done the rest. 

Q4 has been particularly affected by the adverse trading environment, since all
the negative economic factors reached their peak with the price of oil reaching
US$150 per barrel, inflation rising above 4% and consumer confidence dropping
to its lowest level.  As a consequence, our sales in Q4 were negatively
impacted due to these factors and due to unfavourable positioning of Easter in
Q3 this year as compared to Q4 last year. The positioning of the Easter sales
had a significant impact on 3 of our pillars. 

At the beginning of June, we were pleased to announce the decision by His
Highness Sheikh Mohamed bin Khalifa Al-Thani to make a significant investment
in Alfesca and join as a new shareholder; a notable development that clearly
illustrates the attractiveness of Alfesca to the wider international investment
community.  This equity infusion will put Alfesca in a very good position to
finance its external growth strategy and enable it to seize good acquisition
opportunities as they arise. 

Looking forward, we foresee the adverse trading conditions continuing for some
time.  We expect consumption levels to remain low in the coming months with raw
material and utility costs staying at relatively high levels as they do not
currently show any sign suggesting a sharp decrease.  In response, it will be
necessary for us to recover such continued inflationary costs through necessary
price increases, which is inevitably a difficult exercise in the poor retail
environment. 

As a further measure, we are continuing to push ahead with a number of cost
reduction initiatives with the objective of reducing our cost base by aiming to
find saving in such areas as energy consumption; general overheads and
transportation across all parts of the Group.  We expect to see the first
results of these initiatives in the coming quarters. 

We are now in the first half of our new financial year, which is a key period
due to the seasonality of our sales based around Christmas.  Sound innovation,
competent execution and competitiveness will be the key factors in ensuring
that Alfesca continues to deliver satisfactory results.”

Attachments:

financial statements for 30 06 2008.pdf

earnings release - fy2008.pdf